Volkswagen got some good news this week. It finished near the top of the American Customer Satisfaction Index survey of cars sold in the United States. The effects of the good news may help its U.S. sales down the road. In the meantime, its August sales are expected to drop more than 8%, continuing a trend that has gone on for over two years.
Auto research firm Edmunds forecast that VW sales fell 8.5% in August to 49,715, compared to the same month in 2013. Total U.S. car sales for the month are expected to rise 0.7% to 1,511,438. The increase is extremely modest, but August will be good for the industry by historical standards. Edmunds researchers think the month’s sales will be the best for the period since 2003. Much of the improvement will be driven by clearance prices, which tend to undermine margins. According Edmunds.com Senior Analyst Jessica Caldwell:
August is a huge month for dealers who need to clear out 2014 models to make room for 2015 inventory. TV and radio airwaves are filled with these clearance deals and they’re helping to push hesitant car shoppers into “buy now” mode.
VW is no exception. It is offering special financial deals on most of its models in many markets.
VW’s sales problems stand in contrast to those of many other manufacturers in the United States, particularly those below the industry giants in sales. General Motors Co. (NYSE: GM), Ford Motor Co. (NYSE: F) and Toyota Motor Corp. (NYSE: TM) are all expected to have sales drops in August compared to the same month last year. However, Chrysler’s sales are expected to rise 15.5% and Nissan’s by 5.2%.
Disappointing results for VW continue largely to be blamed on an aging and limited model line. That may be true. If so, it will take VW’s global parent years to shore up the U.S. business. In the meantime, its sales probably will continue to drop.